Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Saturday, November 10, 2007

Rising to the occasion

World renowned architect sasses out Malaysia for a major project

Over the week, some of Malaysia's most prominent corporate movers and shakers were treated to the magnificent view of the Burj in Dubai - a tower building, which at 2,313 ft over reaches any other tower in the world, with a stunning swirl silhouette and shape inspired by the desert flowers that often appear as patterns in Islamic structures.

The three-hour presentation and tour by the project's main developer of the "sky-breaking-tower" must have been awe-inspiring. In fact, already, the Burj, as it stands today in its incomplete form (expected year of completion is 2009), is the tallest building in the planet and is said to be going for a whopping RM11,000 per sq feet onwards.

"I was highly impressed," says one business man, who was part of a delegation led by the Kuala Lumpur Business Club for a business mission to the United Arab Emirates. Puns aside, it's hard not to be impressed with one of the world's most magnificent structures born from the union of form and function - that which drives and inspires the world of architecture.

Mustafa Kemal Abadan, design partner in world-famous architect firm New York-based Skidmore, Owings and Merrill (SOM) which designed the Burj, bridged the gap between the stunning innovation and Malaysia recently with his visit to Kuala Lumpur.

That he was here in KL is fodder for imagination and speculation; it is believed that he is undertaking to design a unique structure in one of the city's hotspots. In an interview with BizWeek however, Mustafa is careful not to divulge and details on the project but lends his views on Malaysia's landscape and structures from his observation following an intensive two day-visit.

Mustafa joined SOM New York in 1983 and became a design partner in 1996. In terms of trade volume, SOM is one of the top three architectural firms in the world and has been involved with a "staggering number of important buildings" and has received over 800 design awards from its 10,000 jobs all over the world.

Its show stopping structures include Chicago's 110-story Sears tower (this building held the accolade as the world's tallest building until Malaysia's Petronas Twin Towers took the honour), China's Pearl River Tower (ongoing) which promises to be the world's greenest skyscraper and the 7 World Trade Centre in New York. Last year, the firm celebrated its 70th anniversary.

"Malaysia is a vibrant city and I am delighted to be part of it," he says. Mustafa's work requires him to tap the sensitivities and cultural context of a country and location in making architecture to ensure that it possesses its own unique social and physical relevance. As such and understandably so, his short visit to KL was packed with visits to key spots such as museums and the Putrajaya administrative centre among many others.

Mustafa says he tries to avoid having preconceived notions when visiting a country for the first time. His recent trip, incidentally, happens to be his first to Malaysia.

" Malaysia is a mixture of many. It is vibrant. Probably the most interesting part is the active life. This is what differentiates it from Singapore which has a sort of uniformity. "

He is surprised to have discovered Malaysia's topography: "I didn't expect Malaysia to have mountains."

In Seoul for instance, there are strong mountains. This is an important aspect of a city, and I was enthused by this place. I was born in Turkey, so water, topography and history are major components of what constitutes a city," he adds.

Mustafa points out that Malaysia's skyline is not dominated by a single force; in fact, it is "multi-centred". For instance, there is one centre in KLCC, and another in KL Sentral.

"I would say Malaysia feels more real. There is a greater vibrancy that I can sense in the city. The context of the city is more differentiated. In Singapore, the concentration is going downtown. It is more controlled and planned," he says.

He adds that his real-life view of the much talked about Kuala Lumpur twin towers was rather surprising as it veered somewhat from his impression of it prior to this visit: "I actually had a preconceived notion that the twin towers would be more free standing than it actually was. I thought it was standalone, and that I would only see it once I got into the park. But there were lots of built areas around it and the place was bustling."

He adds that the twin towers was a bold and strong statement and an important point in history as it put Malaysia on the map.

"I think it would be good for Malaysia to add more towers. This could bring more positive development over time, gravitating living conditions to these centres," he says.

Scaling heights
Robust economic changes result in more widespread urbanisation as the city expands. In fact, towers are largely deemed as economic necessities that accompany growth where land is also scarce. Rapid development, more often than not, boosts the population on the back of rising migration into the city. This presents itself with a different set of infrastructure requirements, which need to be addressed as quickly and efficiently as possible, says Mustafa.

He adds that there is now a move to build homes where people can live and work in an integrated way. The reliance on cars is gradually becoming less sustainable. Nonetheless, he adds that this does not encourage architectural growth as the demand is for functional houses.

"The quest for better architecture comes when the economy settles down. It is happening in China. At the moment, the type of projects that can elevate architecture are still in the minority," he says.

Mustafa says that urban issues are hard to solve. Almost all cities in emerging markets are struggling to reorder themselves in terms of traffic, safety and cost and environment.

Cities with stronger governmental structure have an advantage in planning, as it can override the city council's decision for the betterment of the economy.

"There are advantages and disadvantages of a city being controlled. In very highly developed countries, there is much more regulation. This confines the city within certain parameters. New York for example is a very regulated city hence there is a need to think about maximising space," he says.

Mustafa feels that cities that try to create an identity for itself benefit in the long run as people may generally have similar needs but there are regional, cultural and social differences.

"In the late 80s and 90s, because of the post modernisation push, classical buildings sprung up all over the world, but these buildings had no roots. They had no links to history or culture. It was pure aesthetics! To me, this is useless."

Mustafa says that there should be a perfect balance between form and function. An important element which need to be paid due attention in the designing process is the location.

"I am interested in where the building is built. What can be around it, and what cannot. The orientation of the building, where and what it faces. We want to anchor the architecture to the sociology of the place. We want to create a context to where there is uniqueness to the place."

"That is why two buildings in two countries will be designed in completely different ways. Rules change for each country. The form that makes the building will create the context of the area," says Mustafa.

Tower as symbols
Post 9/11, it was generally perceived that the fascination over towers, given their security risk, would have fizzled somewhat.

Contrary to expectations however, Mustafa says there are in fact more skyscrapers on the drawing boards.

"9/11 was blip in how people viewed towers. People need to separate the issue of 9/11, especially when looking at a tower in a dense city. Cities can't just expand horizontally. People who stay a far distance from the city have to drive to work. You need to address this need," he says.

Mustafa adds that a city is better off when there is greater density. And contrary to popular belief, towers aren't just for abstract purposes.

It feeds the need for greater density. As the city expands, the only way for these buildings is to go up. "The taller the building, the higher the cost. Buildings that go beyond 20-30 storey have specific reasons. It is built because of symbolic reasons. For instance, the KLCC allows Malaysia to stand out and make its own statement," says Mustafa.

In the US, the Freedom Tower, which is the replacement of the World Trade Centre following the terrorist attacks on Sept 11, 2001, is more of a symbol of inspiration and an enduring beacon of the New York City skyline rather than anything else.

The Freedom Tower will soar 1,776 ft into the sky and is designed with the classic touch of typical New York skyscrapers while also taking reference from the torch of the Statue of Liberty. The tower is designed by architect David Childs of SOM.

"Super tall towers are on the rise. I am surprised by how many tall buildings are being built. There's going to be a limit to it. One can even built up to 1,000m, which is going to be twice the height of KLCC, but this comes at a great cost," he says.

Artist's impression of the Burj in Dubai, the tallest building in the world when completed

For instance, the Burj Dubai, which is going to be the tallest tower in the world is a symbol of Dubai's central role in the global market. It is an icon of the new Middle East - successful, dynamic and prosperous.

"In Dubai, there is little land available. But wealth in the population needs to find an outlet.

"In the end, it always comes down to economics," he says.

By The Star (By Tee Lin Say)

More info about Burj Dubai

Kepong's makeover

Several major property developments in the area in the past years have raised its status.

In 2002, Perdana ParkCity Sdn Bhd launched its first phase of Desa Park City. The strata-titled double-storey terrace housing, known as Nadia Parkhomes, began from RM400,000.

At that price range, the subsidiary of Sarawak-based timber company Samling Group was setting a new benchmark in Kepong-Segambut area.

An established area comprising several townships with a Kuala Lumpur address, it boasts neither a population of professionals with deep pockets nor masses of urban poor. Predominantly Chinese, the majority of whom were entrepreneurs or tradesmen, they amassed their wealth through shrewd business dealings. But amid the positive elements of a hard-working entrepreneurial community, there were also the weaker elements that gave Kepong its stigma, which started out as Chinese new villages. Until today, developers shy away from that Kepong name. But like any villages around the country, there was an abundance of land.

The Samling Group had, in 1990s, scoured the Klang Valley to site its flagship residential development. It bought 473 acres of the part-rubber part-quarry land for RM200mil in 1999 when the market was at the bottom. This was equivalent to RM425,532 per acre, or less than RM10 per sq ft.

Fast forward 2005. The demand for a new generation of housing in that vicinity caught the attention of developers. That year, RB Land Holdings Bhd purchased a 4.5-acre piece of rubber land adjacent to Desa Park City for RM9.8mil, or about RM50 psf.

Says RB Land’s MD Datuk Soam Heng Choon: “Based on today’s pricing, that was a good price. Now it is about RM65 to RM80 psf.”

RB Land is not an early bird. There was another developer before it. Between 2003 and 2006, Sunway City Bhd had purchased four pieces at the average price range of RM20 psf for their joint venture projects. Its first phase of Sunway SPK was launched in 2004, with double-storey terraced housing beginning at RM526,000.

Says RB Land’s Soam: “The landscape over there has improved considerably...likewise, the roads and other infrastructure. There are today the NKVE, the LPD and the Penchala Link, not to mention the Middle Ring Road Two. Although there was a toll of RM1 (now RM1.60) going towards Petaling Jaya, the pull was there because of the amenities at the Curve. The stigma of gangsters and bad hats, at one time prevalent in the Jinjang and Kepong area, is also slowly beginning to clear.

“The fact that the population, at one time was able to afford double-storey houses with price tags between RM130,000 and RM160,000, are now able to fork out RM600,000 to RM800,000 is very telling,” says Soam.

“This is a very strong factor to spur developers to move in and to provide niche housing,” he says.

The other attraction was the type of housing that was appearing on the landscape. Over the years, the scene has changed from wooden houses to concrete single-storey terraces in the 1970s. Today, the offerings include double-storey, semi-detached and bungalow units. Link houses, though, continue to dominate.

Says Soam: “RB Land undertakes large-scale township development which is the bread and butter of most developers. But we also focus on the high-end market. Township development goes on for years. They provide developers with a steady source of recurring income. Niche development, such as the one we are offering in Bukit Segambut, adds to our bottom line faster because they command higher prices.”

Soam showing a model of the Bayu Sri Bintang

Known as Bayu Sri Bintang, RB Land’s project is adjacent to Desa Park City. The 4.5-acre guarded community will have 26 units of semi-ds and four bungalow units on elevated land. Soam says the look and feel of the place will be exclusive and contemporary with lots of glass and metal deck roofing. “It will be in line with the current trend in the area,” he says.

Bayu Sri Bintang is priced between RM1.4mil and RM2.5mil. They have sold a third of it, with most buyers originating from Kepong/Segambut.

A large portion of the population here are 45 years old and above. Unlike the previous generation, today’s parents buy for their children. And the children, if given a choice, would prefer to stay close to their folks. They enjoy the privacy of having their own homes, yet the convenience of being near enough to the family home. Their preference is landed units, he says.

Soam says in time to come, as land becomes scarce, high-rise dwelling will become the norm. Right now, it is difficult to find large pieces of land that goes into hundreds of acres.

“Those days are over. What we have today are pockets of between three and five acres. Bukit Segambut is still relatively green. The rubber trees are still there but as more developers come in, this will go. This is all part of the urban renewal process,” he says. Besides the landed units in Bayu Sri Bintang, RB Land will also be offering low and high-rise condominium units Bukit Segambut area. This will be launched next year.

“The commercial centres are already there. Carrefour and Jaya Jusco are operating in the area. A large part of the vibrancy is due to linkages in the area to Mont’Kiara, Batu Caves and the city centre are already in place,” says Soam.

In steps Sunway

It was this connectivity that prompted Sunway City Bhd (Suncity) to enter the scene in early 2000s.

At the outset of the interview, its MD Ngian Siew Siong had a geography lesson for his listeners. “We have four different sites here. They are neither Segambut nor Kepong, but Damansara Northwest.”

For years, Suncity has honed its brand. Whether it is Kota Damansara or elsewhere, it is not letting up, particularly when its offerings are half a million and above. Its first phase began with Syarikat Permodalan Kebangsaan Bhd (SPKB). A JV Sunway SPK Homes Sdn Bhd was created for that first 120 acres. The 608 units are 100% sold. It is currently offering Villa Manja, also with SPKB.

This 33-acre development comprises 196 units of semi-detached units with a launching price of RM1.8mil each in a guarded environment with a single exit and entry point.

The density ratio is 6 units per acre, which is low as the ratio for semi-detached is generally 10 units per acre.

Says Ngian: “We want to upgrade the image of this location with quality housing. We want to attract a certain group with this type of housing, at this price point.”

Ngian says the original dwellers of this part of Kuala Lumpur have never seen such a development before and Sunway wants to set new benchmarks in this area. Villa Manja will be a freehold development with security.

The buyers of Suncity homes are a mixed group with the majority coming from Petaling Jaya and Kuala Lumpur.

Those from Kepong are generally upgraders, he says. There are a growing number from the conventional Damansara belt such as Taman Tun Dr Ismail, Damansara Utama, Damansara Jaya and other vicinities such as Bandar Utama, Sri Hartamas and Mont’Kiara. (refer to chart)

Encouraged by the response in the area, the company is scheduling to launch 180 units of three and three-and-a-half-storey townhouses in an 18-acre site next to Country Heights Damansara next year.

“The response to our townhouse developments in Sunway Damansara, Laman Impian, ParkVille Garden and Challis Damansara Garden Villas in Petaling Jaya have been tremendous. We want to do a similar concept over at this third piece of land we have here. The market is ready,” he says.

Its four pieces of land is adjacent to Villa Manja. This will be launched in the latter part of next year.

By The Star (By

Johor-based KSL gets on the Klang scene

The growth of Klang Valley properties, both in terms of pricing and the opening up of new and upgrading of existing areas, has attracted a Johor-based developer.

KSL Holdings has signed a sale and purchase agreement with timber-related business operator Prospell Enterprise Sdn Bhd to buy 446.4 acres of agricultural land for RM156.5mil cash (or RM8.05 per sq ft).

The freehold land, which is located at Jalan Klang–Banting within Blackwater Estate (Klang), is situated about 45km south west of Kuala Lumpur City Centre and is about 15km south of the Klang town centre.

On-going mixed development and mature housing projects e.g. Kota Bayumas by Island & Peninsular Bhd and Bandar Bukit Tinggi 3 by WCT Land Bhd are in the vicinity.

The acquisition is expected to be completed by the second quarter of 2008. The management hopes to launch this project, catering to the middle and high-end market, in the middle of next year.

The Klang property sector has been enjoying good growth of late. The opening of new areas by the likes of WCT group and other players in different parts of this port township has accelerated growth considerably compared with other townships in the vicinity.

As it becomes more crowded and expensive to own a house in the city and suburbs like Petaling Jaya, it is only natural that homebuyers will head further out where prices are more competitive.

On a broader economic growth basis, the interest is greater towards the south rather than the north. In addition, the opening up of new supermarkets has also made Klang rather attractive and self-contained, attracting new entrants. Hence, push and pull factors are contributing to Klang's growth.

The above serves as a background for KSL’s maiden foray into the larger Klang Valley picture. Its decision to spotlight on Klang is also noteworthy as this is an established township on the brink of new growth.

According to an analyst who declined to be named, the price of RM8.05 psf is reasonable.

Real estate consultancy Henry Butcher Malaysia (Sel) Sdn Bhd valued the land at RM157mil only recently.

About five years ago, WCT Land paid RM6.21 psf to Kumpulan Guthrie for the 426 acres for BBT3-Bandar Parklands land in October 2002.

“The RM1.80 psf appreciation over the past five years, which translates into a compounded annual growth rate (CAGR) of 5.3% is reasonable given the new developments in this area,” the analyst says.

Comparing KSL’s purchase to another transaction, even if one were to include the conversion cost from agricultural to mixed development, the total land price is estimated at RM9.05 psf.

This is 9.5% lower than the RM10 psf PG Resorts (subsidiary of Petaling Garden Bhd) paid for 50.9 acres (near the abovementioned 446.4 acres) to Island & Peninsular group back in November 2006.

The new land carries a gross development value (GDV) of at least RM1.5bil over an eight-year development period.

“It is expected to expand KSL’s landbank by 21% to an estimated 2,516 acres. This will be KSL’s first township project in the Klang Valley which will be similar to adjacent BBT3-Bandar Parklands comprising mixed development for the low to medium range market,” the analyst says.

KSL will re-design the layout with a fast development turnaround as it aims to launch the project by next year.

Another analyst who also declined to be named says the management expects pre-tax margins to remain at 40%, similar to its Johor-based projects.

Assuming a two-year development period per phase, this could add an annual net profit of RM28mil or 30% to our financial year 2009 forecast, she says.

The purchase consideration is estimated to raise the group’s proforma net gearing to a still comfortable 0.3 times as at June 30, 2007 from a negligible net debt position currently.

Analysts are positive on the acquisition as it will help to diversify KSL’s source of earnings.

The group’s existing projects are Johor-centred.

This recent purchase would enable KSL to tap into the current boom in the Klang Valley property scene.

“We like KSL for its strong brand name as a Johor developer, which is presently making inroads into the Klang Valley development scene, impressive pre-tax margins of 40%, strong balance sheet and good dividend yields of 5.5%,” an analyst says.

It is a buy call at an unchanged target price of RM3.40, pegged to a 20% discount to our return on net asset value (RNAV) of RM4.25. This implies a financial year 2008 price earnings target of 10 times.

By The Star (By

Stellar performance for Hektar REIT in Q3

PETALING JAYA: Hektar Real Estate Investment Trust's (REIT) strong performance in its third quarter ended Sept 30 may be attributed to shareholder Singapore-listed Frasers Centrepoint Trust (FCT), said an analyst with a local brokerage.

As both were pure-play retail REITs, Hektar REIT was able to tap FCT's expertise in financial, property fund management and real estate asset management services, he said.

Hektar REIT's shopping mall Mahkota Parade is 93.9% occupied

In June, FCT acquired a 27% stake in Hektar REIT for RM104mil. FCT is managed by Frasers Centrepoint Asset Management Ltd, a real estate asset and fund management division of Frasers Centrepoint Ltd, which in turn is a member of the Fraser & Neave Ltd group.

The analyst believed that Hektar REIT had acquisition plans to build on its greenfield assets, but he did not elaborate.

In a statement issued on Wednesday, Hektar REIT said it recorded net property income of RM11.74mil on revenue of RM18.33mil for its third quarter.

Earnings per share was at 2.78 sen, 25.3% higher than earnings forecast, it said, adding that net asset value per unit for the third quarter was RM1.04 while provision for income distribution was RM7.68mil.

Hektar REIT, managed by Hektar Asset Management Sdn Bhd, announced a third distribution per unit (DPU) of 2.4 sen for the quarter and said it was on track to achieve the annual forecast DPU of 9.6 sen.

Hektar Asset Management chief executive officer Datuk Jaafar Abdul Hamid said: “Hektar will distribute to unitholders 9.6 sen for the 13-month period ending Dec 31, or 90% of actual earnings, whichever is higher.

“It will continue to make progress on its growth strategy in terms of organic growth within the portfolio, third-party acquisitions and Hektar group's greenfield and redevelopment projects.”

Hektar REIT's shopping mall portfolio continued to perform with near full-term occupancy of 95.6% in the third quarter, of which Subang Parade was 99.1% occupied and Mahkota Parade 93.9% occupied.

“Portfolio rental reversions continue a positive trend with the third quarter reporting 21 new or renewed tenancies with an average rental increase of 10%.”

Meanwhile, Axis REIT also recorded strong performance for its third quarter ended Sept 30, with net profit of RM37.4mil on revenue of RM11.93mil.

“The better performance was mainly due to a revaluation surplus of RM29.9mil in relation to its five original properties, giving it a net profit of RM7.5mil,” said an analyst with Aseambankers.

Axis REIT was also projected to improve its performance in the fourth quarter ended Dec 31, with a full-quarter contribution from the recently acquired SKS Warehouse and Giant Hypermarket, the analyst added.

He said Axis REIT's proposal to raise fresh capital via the issuance of up to 50 million new units in the fourth quarter would help recapitalise its balance sheet.

This would allow it to gear up for further acquisitions, in line with its target to double its asset size to RM800mil by year-end.

Axis REIT, the largest industrial REIT, recorded changes in fair value of its investment properties worth RM29.92mil, a surplus of the appraised values of its five initial public offering properties.

In a statement, it said the income available for distribution for the third quarter was RM7.52mil.

“Our recent acquisitions have contributed positively to the earnings of the fund.

“It has fuelled the DPU growth from 6.1 sen per unit in the first half ended June 30 to 9.71 sen per unit for the nine months ended Sept 30,” said executive director Stewart LaBrooy in the statement.

He added that a provision was made to distribute 99.7% or RM7.44mil of the realised pre-tax income for the third quarter.

Axis REIT's fund size stood at 205.9 million units for the third quarter, the company said.

By The Star (By Shannen Wong)

IJM Properties confident of good response to newly launched Platino project

IJM Properties confident of good response to newly launched Platino project.

PENANG: In the face of inflation and escalating prices, invest in property, advises IJM Properties Sdn Bhd managing director Teh Kean Ming.

“Some units of our Bayswater resort condominium which was completed this year, were selling at RM288,000 three years ago but after the OC was obtained, these units were re-sold for RM455,000. That’s an appreciation of about 20% per annum.

The crowd at the launching of the Platino condos

“That is just one example. The return on investment for property is very good so we are optimistic that response will be equally good for Platino, our newly launched project at Jalan Udini.

“With building materials cost escalating, property developers will be under pressure to increase their selling prices eventually so it makes sense to invest early,” he said.

He also noted that feedback from property agents showed that Bayswater was doing well in the sub-sale market.

“Some purchasers who missed out on Bayswater do not want to make the same mistake with Platino. And there are also those who bought Bayswater and are now investing in Platino,” he said at the project launch on Wednesday.

Since the soft launch in September, about 35% of the 228 units had been sold and IJM expected a further 30% to be snapped up by year-end, Teh said.

Piling work on the RM191mil 1.4ha development next to the Penang Bridge has started. The project is scheduled for completion by mid-2010.

“Platino offers owners the luxury of space. A unique feature of the project is the garden that has a variety of plants reflecting the four seasons,” he said.

Units have built-up areas of 1,819 to 6,400 sq ft with prices from RM718,00 to RM2.627mil.

Located on 12ha site, Platino is part of the Metro-East mixed-development scheme that is about 60% completed.

According to Teh, IJM would start construction on two luxury condominium blocks next year, targeted at foreign buyers.

By The Star (By Christina Chin)